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Inspecs reports good recovery in first half despite Covid disruption

By Josh White

Date: Wednesday 08 Sep 2021

LONDON (ShareCast) - (Sharecast News) - Eyewear and lens designer and manufacturer Inspecs reported first half revenue of $125.7m on Wednesday, up from $16.7m year-on-year.
The AIM-traded firm said its gross profit margin improved slightly for the six months ended 30 June to 44.9%, from 44.5% a year earlier, while its underlying gross profit margin increased to 49.8% from 44.5%.

Underlying EBITDA rose to $17.7m from $0.7m a year earlier, while underlying basic earnings per share came in at 17 cents, compared to one cent in the first half of 2020, with underlying diluted earnings per share rising to 16 cents from one cent.

Inspecs' reported loss before tax totalled $2.6m, narrowing from $8.3m, while its reported loss after tax shrank to $3.2m from $7.5m.

Reported basic losses per share totalled three cents, compared to 12 cents in the prior year period, with diluted losses per share also narrowing to three cents from 12 cents.

The board described its balance sheet as "strong", with cash at 30 June totalling $37.7m, up from $28.6m at the 2020 interim.

Cash flow from operating activities swung to a positive $15.4m, from a $2.5m outflow a year earlier.

On the operational front, Inspecs said that despite the restrictions of Covid-19, operations had remained fully functional as the business transitioned from a work-from-home basis to a flexible office and home-working environment where appropriate.

Construction work on its Vietnam plant was now complete, despite pandemic-related restrictions, with production said to be at "good" levels.

Further land had been acquired in Vietnam, allowing for an additional expansion of manufacturing capacity.

A new business-to-business digital platform was leading to increased revenues, the board said, while the integration of Eschenbach was continuing across the group.

The company said the launch of the new in-house designed and manufactured sustainable frames, 'Botaniq', was continuing to prove successful.

Inspecs also noted its development of antiviral and antibacterial products for healthcare markets, adding that Norville had been appointed as the UK sales distributor for Leica lenses.

Construction of the new Norville production facility was underway, with completion expected in the fourth quarter.

"These results reflect the hard work that our employees have put in to ensure that the group can operate despite Covid-19 restrictions," said chief executive officer Robin Totterman.

"Our factories have managed to carry on producing in what has been an extraordinarily difficult time and all our factory workers in Vietnam have been vaccinated to enable them to carry on production.

"Our plant in China has continued to operate despite Covid-19 difficulties throughout the period."

Totterman said the company's teams were continuing to drive new innovation, explore opportunities and expand into new markets through integration, organic growth and acquisitions.

"We have strong order books and notwithstanding the potential future disruption from Covid-19, our full year expectations remain unchanged.

"We look forward to providing a further update with our third quarter trading update at the end of October."

At 1002 BST, shares in Inspecs Group were down 0.94% at 396.25p.

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